Money

REVEALED: How you can buy a car on finance for less than your weekly supermarket shop

Did you know that you can buy a car on finance for under £100 a month?

Not an old banger, a brand spanking new car. We didn’t think this was possible either and had to look into it, but if it’s a toss up between loading the kids on the bus every day or getting a brand new car for less than £100 a month, hand us the keys, please.

Your options for buying a car on finance

When buying a car on finance, there are of course a lot of things to consider, like how much of a deposit you can or want to give, how many months you want the payments spread out over, how much interest you’ll end up paying, etc.

Make sure you know the pros and cons of each car finance option and get a quote from car experts, Parkers, to see which is the best option for you.

80% of car-buyers are buying their cars on finance nowadays whereas the other 20% are buying them outright with cash. If you don’t have any savings (or none that you wish to spend on a car) and want to buy a car on finance, these are your main options…

1. Bank Loan

Asking your bank for a loan and using the money to get a car could be an option for you. Make sure it’s worth it though, interest-wise, so that you don’t end up paying through the roof in the end.

2. Personal Contract Purchase (PCP)

PCP finance is the most popular form of new-car finance. It allows you to keep monthly repayments to a minimum by deferring payment of the car’s future residual value until the end of the contract.

When the contract comes to an end you can either:

  • (a) pay off the rest of the amount of the car, buying and owning it outright
  • (b) swap it for another brand new car, or
  • (c) give the keys back and walk away.

3. Hire Purchase (HP)

With Hire Purchase, you can spread the total cost of the car over a set period paying off the loan monthly, only owning the car after you make the final payment.

4. Leasing

Leasing is just like renting so you don’t ever own the car. You’re renting it from a company, and they are the ones responsible for the insurance and tax costs. You also have the option of swapping the car for a newer model whenever you want.

Cars for less than £100 a month

Buying a car on finance costs more in the long run than buying a car with cash because you have interest to consider, but we’ve found seven cars with a total cost of £10,000 (interest included) with the monthly payment being under £100.

1. Suzuki Celerio for £79 a month

The five-door Suzuki Celerio prides itself in being the most spacious of the city cars and is excellent value for money. It’s easy to manoeuvre in tight spaces and with low CO2 emissions, you don’t pay Vehicle Excise Duty (VED) either. Radio and electric front windows are standard but there’s no air-con at this grade.

  • Monthly cost: £79 for 42 months at 5.9% APR
  • Deposit: £1,889
  • Final Balloon Payment: £2,599

2. Nissan Micra for £91.91 a month

The nifty little Nissan Micra comes with air-con, electric windows, alloy wheels and remote central locking. It has an economical 1.2-litre engine and will only set you back £30 a year for VED car tax after the first 12 months which are free.

  • Monthly cost: £91.91 for 25 months at 0% APR
  • Deposit: £2,500
  • Final Balloon Payment: £4,289

3. Kia Picanto for £96.59 a month

The Kia Picanto has become somewhat of a hit with younger buyers. An economical set of wheels representing value for money, the Kia gives you electric windows, a CD player for a stereo, and a 1-litre petrol engine. Kia dealers are also currently offering £1,000 towards your deposit.

  • Monthly cost: £98.59 for 36 months at 4.9% APR
  • Deposit: £1,450 customer deposit, £1,000 dealer contribution
  • Final Balloon Payment: £2,486

4. SEAT Mii for £98.50 a month

This cheap and cheerful number has a spacious cabin and feels like a larger, more solid car to drive than many of its rivals and VED car tax is only £20 a year from the second year onwards.

  • Monthly cost: £98.50 for 36 months at 0% APR
  • Deposit: £1,650
  • Final Balloon Payment: £3,257

5. Peugeot 108 for £98.88

The Peugeot 108 three-door 1-litre Access model comes with a competitive PCP package. It’s really cheap to run and there’s no charge for VED car tax.

  • Monthly cost: £98.88 for 46 months at 4.9% APR
  • Deposit: £1,200
  • Final Balloon Payment: £3,749

6. Fiat Panda for £99 a month

The Fiat Panda is a great city car with light controls and a 1.2-litre engine. Electric windows and central locking are standard, but air-con is not. The retail price for the Panda is £7,925 but thanks to a dealer contribution of £1,400 to your deposit, you could get a £328 discount off the total price of the car.

  • Monthly cost: £99 for 48 months at 6.8% APR (Annual Percentage Rate)
  • Deposit: £749 customer deposit, £1,400 dealer contribution
  • Final Balloon Payment: £2,185

7. Vauxhall Viva for £99 a month

The Vauxhall Viva is a spacious, practical car, a tiny bit smaller than the Vauxhall Corsa. It has a small 1-litre engine and it’s impressively smooth and economical with cheap VED car tax.

  • Monthly cost: £99 for 36 months at 6.9% APR
  • Deposit: £1,999
  • Final Balloon Payment: £3,821

If you’d rather not give any money up-front, find out if you are eligible for zero deposit car finance here.

Deals are correct at time of publication. Everyone’s financial circumstances are different and credit is not always available – Parkers cannot recommend a deal for you specifically. These deals are indicative examples of some packages available at time of publication.

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